Samuelsons has a debtequity ratio of 36 percent sales of 150

Samuelson\'s has a debt-equity ratio of 36 percent, sales of $15,000, net income of $2,500, and total debt of $12,700. What is the return on equity?

Debt Equity ratio = 36%
Equity = Total Debt/Debt Equity Ratio = 12700/ (0.36) = 35277.7778

Return on Equity = Net income/ Equity = 2500/ 35277.7778 = 0.07087 or 7.09%

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$Samuelson\'s has a debt-equity ratio of 36 percent, sales of $15,000, net income of $2,500, and total debt of $12,700. What is the return on equity?SolutionDebt$

Samuelsons has a debtequity ratio of 36 percent sales of 150

Solution

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